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House lawmaker urges passage of Stop Insider Trading Act, proposes ban on members buying individual stocks
Summary
A House lawmaker told colleagues the Stop Insider Trading Act would bar members, their spouses and dependent children from buying individual company stocks, require seven days' advance notice to sell preexisting holdings, and impose fines and disgorgement for violations.
A House lawmaker on the floor urged colleagues to pass the Stop Insider Trading Act, saying it would create a clear rule to prevent members of Congress from profiting on nonpublic information. "Before us is a stop insider trading act," the lawmaker said, arguing the measure removes even the appearance that lawmakers "have leveraged their position for financial gain."
The lawmaker said the bill would ban members, their spouses and dependent children from purchasing individual company shares of stock. "Under this bill, members, their spouses, and their dependent children are prevented from purchasing individual companies shares of stock, period. Full stop," the lawmaker said.
For members who already hold individual stocks when they arrive in Congress, the bill would allow sales only after seven days' advance notice, a change the lawmaker contrasted with current rules that permit a 30-day filing after a transaction. "That 7 days advance notice tells the American people what is going on in advance rather than current law, which allows a 30 day filing after the fact," the lawmaker said.
The lawmaker outlined penalties for violations, saying they would include "a fine equal to $2,000 or 10% of the transaction as well as a disgorgement of profits." The remarks added that violators would forfeit any gain realized if they fail to comply.
The speech framed the bill as addressing enforcement limits: "Insider trading ... is already illegal, and individuals who engage in it should be held accountable by the full force of the law. However, as we know, prosecuting insider trading is actually quite difficult," the lawmaker said, arguing the new measure creates a bright-line standard.
The lawmaker criticized existing disclosure rules enacted under the STOCK Act, saying disclosures are filed a month after transactions and "lack detail," and said increased social media scrutiny has fueled public frustration. The lawmaker concluded by urging colleagues to support the legislation and yielded back the remainder of the time.
